Casey Becker (Drew Barrymore) answers the phone, the man who has called saying he has the wrong number. He calls again, and from there the scene turns into the ultimate trivia contest. If Casey answers the horror based trivia questions right, she and her boyfriend, Steve (Kevin Patrick Walls) get to live. Answer wrong and she dies. She gets a trick question though, "Who is the killer in Friday the 13th?" The man on the other end doesn't say if it is the series or the first film. She answers Jason; in the original film it is his mother. The caller reveals Casey's boyfriend Steve is tied up outside. He is murdered before her eyes.

The caller promises Casey another round, but suddenly, a chair smashes the patio doors, and Casey runs out of the house, armed with a kitchen knife. However, she is caught by a cloaked figure in a mask and stabbed in the shoulder and then strangled. With her last bit of strength, Casey takes off the killer's mask, and sees his face. She is surprised to find out who it is, but the killer's identity isn't revealed to the audience. When her parents return home, they find the house trashed and their daughter missing, indicated by the popcorn that has still been left to cook on the stove. Her mother finds that Casey has been gutted and hung to a tree in the back garden.

The movie then cuts to Sidney Prescott (Neve Campbell), who is attempting to cope with the anniversary of her mother's brutal rape and murder. The following night, while at home alone, the killer, who calls his/her victims on the phone and taunts them before attacking, invades her house and attempts to kill her. The killer is known as Ghostface, who wears a Halloween costume reminiscent of Edvard Munch's painting The Scream.

Sidney tries to sort through the trauma of being attacked and, in reaction to circumstantial evidence, points an accusatory finger at her boyfriend Billy Loomis, played by Skeet Ulrich. She decides to stay at the home of her friend Tatum Riley (Rose McGowan) and Tatum's brother Dwight, nicknamed Dewey (David Arquette), the Deputy sheriff. While there, she receives a phone call from the killer. Billy is released, as he could not have placed the call from jail, however it is later discovered that it was possible for him to have used his one allowed phone call to call her from jail.

Already under considerable stress, Sidney is forced to deal with the scandalization of her own attack by ambitious tabloid television newswoman Gale Weathers (Courteny Cox). Gale is responsible for a tell-all book revealing the promiscuous affair between Sidney's mother and her convicted killer, Cotton Weary (Liev Schreiber). School is soon canceled as a precautionary measure, leaving the building temporarily abandoned. Despite the closing, the school principal (Henry Winkler) is killed while in school and Sidney encounters her attacker a second time, barely managing to escape. Unaware of their principal's fate, the teenagers plan a party. They are joined by Randy Meeks (Jamie Kennedy), a horror movie buff, and Tatum's boyfriend Stu Macher (Matthew Lillard), who suggested the party. The party quickly becomes a bloodbath as the killer murders Tatum, who dies when she becomes stuck inside an automatic garage door.

Meanwhile, Gale, sensing the potential for a major scoop, hides a video camera inside the house. She then goes outside and begins searching for anything suspicious, with the help of officer Dewey. Meanwhile, at the party, Billy shows up and is confronted by Sidney; they eventually head upstairs and have sex. The partygoers soon receive word of the principal's death, and head to the school football field to find his corpse.

After sex, Billy is stabbed by the killer while getting dressed, forcing Sidney to run out of the room to escape the killer. She escapes out the window where she looks up at the garage and sees Tatum's dead body. Randy, watching television, narrowly avoids death when the killer walks up behind him only to be interrupted by Sidney's screams. The killer leaves Randy unnoticed and chases after Sidney instead. Inside Gale's news van, her cameraman Kenny (W. Earl Brown) witnesses the killer's attempts to murder Randy and then lets a running Sidney inside. Kenny steps outside the van to try to warn Randy, but has his throat slashed by the killer.

Dewey leaves the house, and falls down to reveal a knife in his back. Sidney runs back to the house where she is greeted by Randy and Stu, who are presented as the only remaining suspects. When they both accuse each other of being the killer, Sidney does not know who to trust, and slams the door in their faces.

Billy comes falling down the stairs, not dead, but seriously injured. Sidney helps him up and gives him a gun for safety. Suddenly, Billy shoots Randy, and shows the blood on his chest is corn syrup (as used in the production of Carrie). Sidney turns and finds Stu, who unveils the voice-changing box.

Finally, the truth is revealed: The murders were planned and carried out by Billy and Stu, as a means for getting revenge on Sidney's mother; it is revealed that Sidney's mother had an affair with Billy's father and this was the reason for the demise of Billy's parents' marriage. It is also revealed that it was Billy who murdered Sidney's mother and not Cotton Weary, who was convicted of the murder based upon Sidney's testimony; Billy's rage over his parents splitting up because of the affair with Sidney's mother turned him into a murderer. Sidney is saved by Gale, however briefly, (she forgot about the gun's safety) until she is again knocked unconscious. Stu and Billy also reveal they have abducted Sidney's father and it was his cellphone they used to make their ominous phone calls, and that they planned to murder Sidney and her father by shooting him in the head and making it seem as if he committed suicide after committing the murders. Stu and Billy then stab each other in non-vital places to make it seem like they were victims of Mr. Prescott's emotional and murderous breakdown while getting away with committing the murders. Things begin to fall apart though; Billy stabs Stu too deeply and he begins to bleed profusely. Sidney then manages to escape while they're dealing with Gale, before she kills Stu in self defense. Randy shows he is still alive, crediting it to the fact that he is a virgin. Billy gets up and begins to choke Sidney to death, when he is shot by Gale. Randy warns Sidney and Gale that he'll "come back to life" for one more scare. However, immediately after he does, Sidney shoots him in the head, finally killing him. Dewey is shown being carried away in a stretcher, alive. Gale making an impromptu report on the events of the previous night as the authorities finally arrive on the crime scene.